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VCampus' Security Blanket

New course offerings in computer and network security woke up the online educator's shares.

Shares of online learning company VCampus(NASDAQ:VCMP) rose more than 50% in Friday's trading (roughly 11 million stubs exchanged hands, nearly twice the total number of shares the company has outstanding) on news that it will begin offering a suite of courses for people studying for certification in online security.

Investors clearly believe there will be significant demand for the new offerings, which will come in a seven-course package and cost approximately $1,000. (The company targets the government, corporate training, and distance learning markets, last year garnering about 70% of its $5.5 million in revenues from Park University, the U.S. Department of Veterans Affairs, and a large insurance company.)

It's perhaps understandable that investors would expect good things from a new set of courses from VCampus. That's not only because the subject matter -- things like cryptography and network security -- is frequently in the news these days but also because the consultative approach taken by online learning companies generally suggests that new "products" reflect some kind of specifically expressed demand.

There was, unfortunately, no revised financial guidance in last week's press release. As a result, it's difficult to determine at this time whether the company already has orders for its new courses lined up. That may be a good thing in VCampus' case. It's difficult to see the company as much more than a work in progress: It's unprofitable on an operating basis, though substantial reductions in sales and marketing expenses have narrowed the gap in recent years.

VCampus, financially healthier after a $5.3 million cash infusion in late March from a private investment group, believes it has the dough to make it to net profitability and free cash flows. Investors will have to continue to carefully watch for top-line growth, primarily driven by tuition revenue. The picture hasn't always been rosy, considering how shares have plummeted in recent years.